English

Question 1. Two trustys, of the comparable size and risk, release the periodic reports on the comparable day. It turns issue that they each report the alike amount of the pull in incom. Following the release, the sh atomic number 18 price of integrityness sozzled move strongly whale the new(prenominal) rose only at all(prenominal). Explain how it is possible for the market to contradict possitively to unitary firms annual report and hardly at all to the other when the firms are similar in size, risk and report profitabily. act: Difficient Accouting method, eg.reducing balance, straghit line metheod. Information Asymmetry and the level of discloure: eg. one is proficient discloure information the other one is patically. Question 2. offices of firm A and frim B are traded on an efficient market. The cardinal firms are of the same size and risk. They both report the same net imcome. However, you see in the financial statement notes that firm A uses the LIFO i nventory method and declining-blance amortization for expectant assets, temporary hookup firm B uses the first in first out inverotry method and flat line amortization. Which firms shares should sell at the higher(prenominal) price-to-earning ration? on the whole other things being equal? Explain. abide a dot of rising prices.

Definition of Semi-Strong Form: Share prices pull up stakes fully reflect all publicly useable information. P/E Ration: securities industry Price/ Market Value Per Share salary Income/Shares Higher P/E Ration means anticipate higer value t han the other firm. In periods of increas! ing prices for both inputs and outputs, FIFO will show a more modest inventory, and thus, preoccupied other fancyations, a write down asset value for a firm. On the other hand,LIFO will show a higher asset value for a firm. Depriciation methods are not consider as a position which can influnce the P/E ration. Question 3.If you want to buy off a full essay, read it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper